Innovation
and the city
New York’s next mayor will need to address a number
of critical challenges facing the city. This report
spotlights 15 innovative policies from cities across the
U.S. and around the globe that could serve as a model.
June 2013
www.nycfuture.org
www.wagner.nyu.edu/labs
Introduction
Innovation and the CIty
4

Idea 1: Updating 311 | Boston & Chicago
A More Responsive, Transparent & Participatory 311
6

Idea 2: Kindergarten to College Savings | San Francisco
Fostering a College-Going Culture & Allaying Rising Tuition Costs
7

Idea 3: Innovation Loan Fund | Chicago
Loan Fund Seeds New Ideas at the Agency Level
8

Idea 4: Peak Academy | Denver
Sending Agency Staff to Innovation School
9

Idea 5: Project Oracle | London
Measuring Impact in Human Services
10
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Idea 6: Spacehive | London
Crowdsourcing Capital Projects
11
Idea 7: Zero Waste | San Francisco
A Comprehensive Approach to Increasing Recycling & Improving Waste Management
12
This report was written by Neil Kleiman, Adam Forman, Jae Ko, David Giles, and Jonathan Bowles. Additional research by Adam Eckstein, Kahliah Laney,
Christian Gonzalez-Rivera, Emily Laskodi, and Sa Liu.
Design by Ahmad Dowla and Jae Ko.
This research and report were made possible by generous support from Citi Community Development. General operating support for Center for an Urban Future
has been provided by the Bernard F. and Alva B. Gimbel
Foundation.
Special thanks to Eileen Auld, Bethany Godsoe, Colleen
SchwartzCoffey and Michelle Ceran.
Cover image: tovovan/shutterstock.com

Idea 8: Digital Badging | Philadelphia, Providence & CHicago
Creating an Alternative Assessment System for Out-of-School Programs
14

Idea 9: Budget Savings Commission | Chicago
Private Firms Develop Mass Budget Savings
15

Idea 10: Open Data | Seattle & San Francisco
A More Transparent, Inclusive & Collaborative Government
16

Idea 11: City ID Prepaid MasterCard | Oakland
Municipal Identification & Debit Card
17

Idea 12: Accessory Dwelling Units & Basement Conversions | Seattle & Santa Cruz
Helping the Elderly to Comfortably & Affordably “Age in Place”
18

Idea 13: Prize-linked Savings | Michigan
Incentivizing Savings Accounts in Underbanked Communities
20

Idea 14: Immigrant Export Initiative | Los Angeles & Chicago
Helping Immigrant-Run Businesses Grow through Exporting
21


Idea 15: Commuter Tax Benefit | San Francisco
Expanding Access to Federal Pre-Tax Transit Benefits
22
The Wagner Innovation Labs are a part of the NYU
Robert F. Wagner Graduate School of Public Service.
They are a new series of experiments that marry theory
and practice to promote informed, evidence-based policy-making in a complex world. Each Lab has its own
focus and approach, and operates independently, but all
reflect NYU Wagner’s broad commitment to bringing
scholars, thinkers and practitioners together to enrich
the policy-making process.
The Center for an Urban Future is a NYC-based policy
institute dedicated to highlighting the critical opportunities and challenges facing New York and other cities,
and providing fresh ideas and workable solutions to
policymakers. The Center’s primary focus is on growing and diversifying the local economy, expanding economic opportunity and targeting problems facing lowincome and working-class neighborhoods.
www.wagner.nyu.edu/labs
www.nycfuture.org
Innovation and the city
With Washington trapped in budget battles and partisan gridlock, cities have emerged as the best source
of government innovation.
Nowhere is this more visible than in New York
City.
Since taking office in 2002, Mayor Bloomberg
has introduced a steady stream of innovative policies,
from a competition to recruit a new applied sciences campus and a far-reaching sustainability plan, to
micro-apartments and a first-in-the-nation Office of
Financial Empowerment. Some reforms have been
more successful than others, and some more widely
embraced by New Yorkers, but these policy innovations have undeniably reshaped city government,
improving service delivery and sparking economic
growth.
Yet for all of Mayor Bloomberg’s achievements,
many problems will remain when he exits City Hall
at the end of the year. To successfully address these
challenges, the next mayor will have to be as ambitious, experimental and innovative as his or her predecessor.
And just as Mayor Bloomberg drew inspiration
from cities around the world, the next mayor needn’t
reinvent the wheel. As we detail in this report, cities
across the country and around the globe—from Chicago and Denver to Seattle and London—have pioneered a number of innovative government initiatives. The best of these reforms have clear potential
for replication in New York.
Over the last six months, researchers at the
Center for an Urban Future and NYU Wagner interviewed nearly 200 policy experts in cities across
the country and around the globe, looking for game-
changing reforms that have proven effective in other
cities, that are scalable in New York and that the next
mayor could implement. This report, “Innovation
and the City,” presents 15 of the most promising reforms—from San Francisco’s bold plan to establish a
$50 college savings account for every kindergartener
in public school, to Boston’s pioneering approach to
remaking the 311 system for today’s smartphone age
and London’s ambitious experiment with crowdfunding for public infrastructure projects.
Mayoral transitions present a unique opportunity to develop new and innovative policy ideas. As
Mayor Bloomberg has noted, a mayor must have the
courage to fail in order to see what works. Yet once
in office, this failure is less tolerated. Politicians are
expected to get it right the first time, right out of the
gate.
This effort—which we have referred to as the
Mayoral Policy Lab—aims to invigorate the cycle of
innovation and experimentation. Providing a new
twist on the election cycle debate, we offer the New
York City mayoral candidates a menu of practical
policy ideas drawn from the most inspired policies
in the most vibrant cities around the country and the
world. If cities are our “laboratories of innovation,”
our research provides rigorous policy “experiments,”
offering novel, proven and scalable reforms that can
improve, and possibly transform, the city.
This policy lab has been rooted in a unique partnership: the Center for an Urban Future, one of New
York’s leading think tanks, paired with NYU Wagner,
a public service graduate school known for blending
theory and practice. The entire effort has been supported by Citi, whose work through Citi Community
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 

   
Development and the Citi for Cities initiative is focused on fostering urban innovation throughout the
world.
More than a casual scan, we developed a rigorous and unique vetting process. In fact, we know of
no other attempts to systematically curate innovative
reforms and customize them for a new City administration. Our research methodology operated much
like a funnel: broadly identifying new ideas at first,
systematically winnowing them down, and then
carefully tailoring the final slate of reforms to New
York’s needs and character. The process is more precisely captured below.
In the first phase, we cast a wide net, interviewing roughly 200 policy experts from outside of New
York. This included current and former mayors and
chiefs of staff in cities around the world, as well as
leading thinkers from philanthropic foundations,
policy institutes, corporations, labor unions and advocacy groups. We also reviewed hundreds of articles, policy briefs and books reporting on noteworthy innovations.
The result was a first cut of 120 policies meriting
a closer look. To gauge their feasibility in New York,
we assessed these ideas with policy experts from
around the five boroughs, many of whom are veterans of city government. As anticipated, we found
the vast majority of our initial ideas either unworkable in New York or already being implemented by
the Bloomberg administration. This left us with 20
promising reforms that both complemented and
could be brought to scale in New York’s unique policy terrain.


In our final phase, we selected a group of 40 leaders from the city’s business, philanthropic and nonprofit sectors. At two expert roundtables held in late
March 2013 at NYU Wagner, this brain trust provided input on our ideas, outlining how to improve
some and recommending others be eliminated entirely.
The feedback from these convenings resulted in
a final list of 15 policies, all of which are laid out in
detail in this report. It is a wide-ranging collection
of reforms road-tested and retrofitted for New York.
Some ideas are grand in scale: a citywide evaluation
system for all nonprofits in London, and the introduction of digital badging to provide alternative credentials for non-academic skills acquisition. Others
are simply good management tools, providing a platform for continued innovation. The Denver Peak
Academy, for instance, provides innovation training
to line-level agency staff, and the Chicago Loan Fund
supports extended agency collaboration to stimulate
efficiency and cost-savings.
The innovations are not listed in a particular order, as we believe each will appeal to different needs
the city will face. Collectively, these ideas provide a
roadmap for the next mayor, addressing key challenges and helping to ensure that New York remains
effective and efficient in a period of declining federal
support.
But New York is not the only city that can benefit from this inventory of innovation. Los Angeles
and Minneapolis will be electing new mayors, and
municipal leaders everywhere are facing significant
challenges. We hope these ideas will inspire innovation throughout the country, in 2014 and beyond.
5
311
1  Updating
Boston & Chicago • A More Responsive, Transparent & Participatory 311
feed and posts updates when cases are closed. Its smartphone app—the first in the country and still the most emulated—allows users to read recent submissions, look at
accompanying pictures and even view their location on a
map. The “City Worker” app allows government employees to access service requests while they are in the field
and officially close out cases without ever returning to the
office. Service requests are directly routed to the nearest
work crew from the responsible department, automatically and efficiently assigning responsibility.
In New York, a heavily curated 311 Twitter account
serves mainly as a resource for parking regulations rather than for information on service requests. The City’s
smartphone app does not allow users to see others submissions, either on a map or as a running tally of recent
requests.
And while there is much to learn from peer cities,
New York also faces unique challenges. An astounding
22 percent of the city’s population has limited English
proficiency, yet only 3 percent of 311 calls are handled in
foreign languages. With service distribution and worker
deployment both reactively and proactively informed by
311 data, low call volumes from this group can lead to systematic exclusion.
A 311 system that leverages the full power of the Internet and mobile computing would build on the old system to further increase the effectiveness of government
services and inform decision making among agencies. 311
data and analytics have already allowed city agencies to
proactively and efficiently deploy a wide variety of services and programs targetting noise abatement, disease control and pothole repair efforts, among many others. As the
311 API ecosystem matures, programmers envision apps
that allow for more meaningful forms of citizen engagement, enabling residents to collaborate with one another
and city agencies when planning streetscapes, parks and
other neighborhood amenities.
INNOVATION IN A NUTSHELL
311 services in several cities are leveraging open source
data and the capabilities of mobile computing to better
serve residents and increase accountability among government agencies.
KEY COMPONENTS
»» Open source data available for independent developers to create innovative software programs
»» Real-time updates on the status of requests
»» Mobile apps that allow government workers to both
access and close out cases while remaining in the field
BENEFITS
»» Enables residents to view the status and location of
service requests in real-time
»» Encourages private tech-sector innovation
»» Improves government agencies’ response times
Though the Bloomberg administration built one of the
first and highest performing 311 systems, the platform for
the smartphone era is being created outside of New York.
Boston, Chicago, San Francisco and Washington, DC
are distinguished by the quantity and quality of their 311
open data. By adopting a standardized Application Programming Interface (API) protocol, they have granted
programmers access to an interactive data set, allowing
them to not only read the data but also submit queries
and new information. This enhances the functionality of
their software and increases interoperability so that apps
developed for one of those cities can be easily adapted to
another.
When cities farm out innovation to private developers, they save money and stimulate business development in the civic-tech sector. Chicago’s “Service Tracker,”
for instance, was developed by programmers from Code
for America. It allows residents to monitor the status of
their service requests at every stage of the process—from
inspection, to inter-departmental hand-offs, to completion—and receive email updates along the way.
In Boston, the Department of Innovation and Technology and the Office of Urban Mechanics work with innovators from inside and outside of government, helping
them incubate and scale their ideas. Citizens Connect,
Boston’s version of 311, has been a primary beneficiary.
Its Twitter account uploads all open service requests to its
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to College Savings
2  Kindergarten
San Francisco • Fostering a College-Going Culture & Allaying Rising Tuition Costs
At a time when four-year college degrees have become the standard requirement for almost any well-paying job, K2C could provide a critical leg up for struggling
families in New York. Individuals with a four-year degree
can expect to earn twice as much as those without one, but
rising tuition costs are putting those degrees out of reach
for low- and middle-income families. Between 2008 and
2011, the average net cost of attending college increased
by 4.6 percent, while the national student loan debt increased to nearly $1 trillion. In New York, where 72 percent of school children receive free and reduced lunches,
many kids aren’t even considering college, let alone saving
for it.
As Anee Barr, the K2C program manager, notes, the
program also benefits underbanked parents by creating a
bridge into the financial mainstream. In New York, where
more than 800,000 residents have no bank account, this
could prove as valuable as incentivizing college.
While acknowledging the benefits of K2C, one senior
New York City official expressed concern about the cost
of the program. He worried that scaling it to a city with
over 1.1 million public school students would prove prohibitively expensive. Cathie Mahon, a former city official
and current CEO of the National Federation of Community Development Credit Unions, however, thinks the
expense could be overcome if agencies are savvy about
pooling matching funds. The program is almost tailormade for private sector matches, and if any city is well positioned to take advantage of financial industry resources,
it’s New York. According to Mahon, several federal funding streams could also be tapped.
The City could use federal dollars from the Assets for
Independence Funding and Gear Up programs targeting middle school and high school students. Introducing
matching funds at different stages in a child’s educational
career, rather than providing all the money up front as
San Francisco does, would provide an incentive to stay
in school. Federal dollars could fund students from financially strapped families while private sector matching covers the rest. Or, instead of universal matching, the initial
bank deposits could go exclusively to students who qualify
for free lunches.
However the program is structured, the benefits are
clear: improving college affordability and assisting the
under-banked.
INNOVATION IN A NUTSHELL
The City of San Francisco is funding the country’s first
universal college savings account program for all of its
public school kindergartners. The initiative will foster a
college-going culture and alleviate rising tuition costs.
KEY COMPONENTS
»» A public-private partnership with Citi, which manages the accounts, and local community partners, which
raise money to match city funds
»» Seed money from the City for all new kindergarten
students and twice as much for those who qualify for
free and reduced lunch
»» City and private contributions are retracted if students do not use them for college-related expenses
before the age of 25, but can, of course, keep anything
they added to the account along the way
BENEFITS
»» Incentivizes kids to go to college
»» Provides funding for ever-rising tuition costs
»» Exposes under-banked families to mainstream banking system
In San Francisco, the “Kindergarten to College” program
(K2C) is helping school kids attend college without accruing massive debt. Funded through a public-private
partnership, the program kick-starts college funding for
all public school students. It is the first of its kind in the
nation.
Launched in 2010 and fully scaled in 2012, the City
allocated $190,000 from general funds to support the program, which now has about 8,000 accounts, with 4,700
new accounts each year. Every city public school kindergartner receives a “seed” deposit of $50 dollars into their
account to start. Low-income students who qualify for
free and reduced lunches receive an additional $50 dollars. To incentivize families to contribute to the account,
K2C offers private sector matches. A pool of funds raised
by community partners EARN and The San Francisco
Foundation is used to match family deposits dollar-fordollar up to $100. An additional $100 will be added for
those who enroll in monthly automatic deposits. In total,
low-income families who enroll in the program and make
monthly automatic deposits of at least $100 will receive as
much as $300 in return.
7
Loan Fund
3  Innovation
Chicago • Loan Fund Seeds New Ideas at the Agency Level
The loan will move the agency from a manual process of
scheduling inspections to a fully automated system that
saves time for the applicant and the Buildings Department. The plan is to expand the new system to meet all of
the city government’s inspection scheduling needs.
Managing the City’s new loan application process
doesn’t cost the city any money. All projects are tracked by
the budget office. To guide the process, the Mayor created
a Loan Committee composed of senior aides and advisors,
including the City’s chief financial officer, chief of policy,
chief operating officer, and the director of the Bloomberg Innovation Delivery Team. The Committee reviews
proposals and signals whether they should be advanced.
It provides feedback to applicants, approves final submissions and oversees the creation of progress reports. Crossagency projects, eligible for larger loans, are actively encouraged. And automations or innovations pioneered by
one agency have been launched as pilot projects for scaling
up across city government (as in the case of the Buildings
Department’s new inspection scheduling system).
The Committee also identifies proposals that may not
generate enough savings to be eligible for a loan, but are
worth pursuing and can be funded through other means.
Taken together, the loan process surfaces agency-level innovations, which then can be interpreted, supported
and when warranted, implemented citywide through the
work of the Loan Committee.
One issue has cropped up: after the initial wave of applications, the submissions slowed. The City realized that
agencies had a lot of potential for innovation, but lacked
the bandwidth to generate proposals. To remedy this, the
City shifted from requiring full-blown proposals to asking for a one-page initial summary. The summaries are
voted thumbs up or down by the Committee, with comments. The streamlined process saves the agency sponsor
from investing too much time in an unpromising idea.
The mayor has also detailed City Hall staff to assist the
agencies in the proposal development process, providing
added capacity and critical insight into the Mayor’s priorities. Applications are back up, with a dozen submitted so
far this year.
New York City’s approach to funding innovations and
cost savings is comparatively informal. Agencies can, and
do, approach the Mayor’s Office of Management and Budget (OMB) with proposals, seeking funding.
But there is no loud, continual broadcast of this opportunity, as there is with the Loan Fund, which promotes
INNOVATION IN A NUTSHELL
Chicago’s multi-million dollar, revolving loan fund surfaces the most promising new ideas generated within city
agencies—ideas intended to pay for themselves within five
years through marked improvements in service delivery.
KEY COMPONENTS
»» The City budget office works with a committee of
mayoral aides to vet agencies’ loan applications
»» Agencies must prove major savings or revenue increases are in the offing; otherwise, the funds will be
sliced from their budget
»» Cross-agency proposals are strongly encouraged and
eligible for larger awards
BENEFITS
»» Loans cultivate, support and advance reforms that
germinate at the agency level
»» The Mayor’s Loan Committee lets City Hall scope out
ideas with potential applicability and impact citywide
There’s often a feeling in government agencies that employees could generate cost savings and innovation if only
anyone would listen.
The City of Chicago has responded by creating a
modern-day suggestion box.
After Rahm Emanuel became mayor in 2011, he tasked
the City’s budget office with developing a $20-million,
pooled loan fund to support promising ideas proposed by
agencies. There are few parameters for idea submissions,
except that the proposal has to pay for itself, substantively
improve services, and under no circumstances lead to the
hiring of additional staff. Within five years, if the idea
doesn’t pay for itself, the sponsoring agency will see the
costs carved out of its budget.
The early results of the project are encouraging. In
the first budget cycle, a dozen ideas bubbled up, and four
received funding. One was a $900,000 loan to the Departments of Public Health, Consumer Protection and Business Affairs to support a new effort to reduce the black
market sale of cigarettes. The effort provides cash rewards
to citizens reporting illegal tobacco sales and is expected
to pay for itself within three years through increased cigarette tax revenue.
About $240,000 has been assigned to the Department
of Buildings to ease the city’s notorious inspection delays.
8
the loan program four times a year. The Loan Fund also
provides an effective vehicle for encouraging cross-agency
collaboration. And Chicago has aimed for transparency,
issuing press releases and celebrating success. Experts in
our roundtable discussions emphasized that this last element is critical, and additional recognition, possibly in the
form of an annual award from a respected good government group, would be helpful.
New York is well positioned to chart a similar path,
given OMB’s support for cost-saving proposals, continuous oversight and analysis, and a governance structure
that includes a surfeit of deputy mayors with cross-agency
portfolios. These are the officials who could make up the
core of a pathbreaking loan review committee and loan
program for the entire city government.
Academy
4  Peak
Denver • Sending Agency Staff to Innovation School
clear with the mayor that such ambitions would never
reach their full potential without everyone who worked
for the City embracing a culture of innovation Reform
cannot be cooked up at the senior level and pushed down,
he said; it has to take root throughout the city, from entry-level workers all the way up to department heads.
To spread such a culture, the Hancock administration
created the Peak Academy, the City’s first-ever innovation
school. The Academy is staffed by two analysts from the
budget office who teach all the classes. No money is spent
on the courses, since the Academy has adopted an off-theshelf performance improvement curriculum called Lean,
used internally by many corporations.
Each participant is encouraged to generate new ideas
at the training itself and bring them back to his or her home
agency. This practice has already led to the implementation of dozens of common sense cost-saving reforms. In
one session, staff from the police, 911 and license departments realized that manually inputting alarm permit data
was wasting time, leading to missed data and needlessly
costing the city thousands of dollars. In a few days at the
Academy, they charted an automated and coordinated approach, which went into effect this summer. And, eight
colleagues at the City’s human services agency realized
that their myriad contracts with nonprofits lacked clarity
of purpose, data and expectations. The workers created
consistent, cross-silo forms and procedures. They have
also instituted an Open House for community groups, a
forum that provides a friendly opportunity to meet with
providers and reduce contract misunderstandings.
Edinger and his team are adamant about continuing
to support front-line staff on these and future endeavors.
For those who receive training, agency management raises and promotions are now tied to the number and quality
of innovations advanced by their employees. Additionally,
ideas are profiled monthly on a public website. And the
mayor himself is prompted by Edinger to nudge agency
INNOVATION IN A NUTSHELL
Based on the belief that true innovation must be embraced
by line-level staff as much as by mayors and agency heads,
Denver has launched Peak Academy, an innovation school
where city employees can get training, develop new ideas
and gain support for new approaches.
KEY COMPONENTS
»» Agency managers nominate staff to undergo a fiveday training, where they learn performance measurement skills and tools for continuous improvement
»» Incentives for supervisors and agency heads are in
place to support the work of Academy graduates
BENEFITS
»» Innovations developed by the Mayor and department
heads are more likely to receive support than resistance at the agency level
»» Agency workers themselves are developing new ideas
that are being implemented throughout the city
“Culture will eat strategy for lunch every time,” warns David Edinger, Denver’s chief performance officer.
Edinger spent time in the private sector and then
worked for the previous mayor. In his governmental role,
he saw many good innovations die inside the agencies in
which they were born. As he and other management experts have noted, direct-line workers either wait out reform ideas that they dislike, or simply lack the tools and
training orientation to move a promising new initiative
to actuation.
When Mayor Michael Hancock took office in 2011,
he had grand reform plans of his own, and tapped Edinger
to help lead them. The initial thinking was for the City
to implement a version of CitiStat, a notable data-driven
approach to accountability and reform that began in Baltimore and has been replicated widely. But Edinger was
9
heads about recent Academy grads, asking them what reforms the mayor can expect to see from them.
Neither New York, nor any city we could identify, has
anything quite like a Peak Academy. Denver’s experience
demonstrates that such a school creates cross-currents
of fresh thinking and reformer energies. The mayor and
his managers’ reinvention plans are now reaching a more
receptive audience at the agency level. Meanwhile, linelevel staff members are advancing reforms big and small
within their departments, increasing morale.
A well-equipped workforce will be a huge issue in
New York as tens of thousands of employees face retirement. Experts at the Mayoral Lab roundtable sessions
noted that a Peak Academy-like approach could work
5

well in New York to address issues of morale, improving retention of younger workers. But it would have to
be retrofitted for the scale and scope of the Big Apple. To
do this, roundtable participants recommended partnering
with an established institution such as Coro or the City
University. And they stressed that in New York there
must be buy-in and strong support from organized labor,
which was not the case in Denver.
There was general agreement that a Peak Academy
enterprise that empowers New York’s public workforce
will be crucial in the years ahead. As in Denver, the key is
fostering an internal culture of innovation that can immediately take root and receive support for creating a better
city.
Project Oracle
London • Measuring Impact in Human Services
INNOVATION IN A NUTSHELL
A mayoral-led consortium of foundations and universities
in London is moving all nonprofit youth organizations
toward consistent, academically rigorous evaluation measures, a revolutionary turn away from the norm in performance monitoring of social service providers. The new
system will for the first time enable the city to gauge and
compare the relative progress made by publicly funded
entities who work with disadvantaged teens and families.
KEY COMPONENTS
»» Rather than forcing evaluation on nonprofits, the
mayor introduced a uniform and easy-to-use evaluation system within a supportive environment
»» Every participating nonprofit receives subsidized
training and is matched with university professors
and college students. Successes are celebrated through
inter-agency competitions and cash prizes
BENEFITS
»» A common framework for assessment allows the
public and philanthropic sectors to determine which
social service programs are working, while allowing
nonprofits to analyze what’s making a real difference
and what needs to be addressed operationally
When London Mayor Boris Johnson took office in 2008
with a promise to lower youth crime, he asked his top aides
to identify the best youth services programs. The aides
confessed that London—like every city in the world—re-
ally didn’t know for sure. Most organizations just did not
measure impact.
Paucity of data is a fact throughout the human services field. Systems such as child care, child welfare and
youth services provide lifelines and enrichment, often
serving the most troubled and disadvantaged. Yet as Johnson found out, the success of these programs—unlike road
construction or crime fighting—is less than concrete and
exceedingly difficult to measure.
Johnson decided he had to solve this. He assigned
a top lieutenant to the project who consulted with experts around the world. Based on this research, a fivelevel “standards of evidence” framework was created.
The framework—dubbed Project Oracle—is cumulative,
meaning that it is necessary to get one and then two of
them right before advancing to higher levels. Level one is
a basic theory of change—a simple articulation of the organization’s goals, which remarkably few nonprofits have.
Level two is a straightforward evaluation plan. From
there, additional levels become increasingly thorough in
their ability to measure impact.
With the framework in hand, the issue of how to get
buy-in from youth organizations came up next. First, the
mayor converted an advisory board of London grantmakers and academics into a governing consortium for
the entire effort, tapping the expertise of a wide range of
stakeholders and leaders dedicated to both performance
measurement and nonprofit success.
The consortium devised a bundle of supports and incentives. All nonprofits can access highly subsidized training in evaluation methods. And there are also lively evalu-
10
ation competitions featuring cash prizes. But probably the
biggest support has been a connection to local universities
for any participating nonprofit. Local colleges make students available as onsite project managers and data collectors, while professors offer technical assistance.
Another key aspect of the Project Oracle approach is
the openness to organizational creativity. There is a common framework that ensures data are tracked and results
are reported, but within that, groups can design their
evaluation in vastly different ways. So organizations that
already have a plan or want one that is unique to them still
fit within the broader Oracle framework.
Nearly 100 organizations have signed up, and Ruth
Puttick at Nesta, a London policy outfit evaluating the
consortium program, noted, “This is the only citywide
evidence-generation campaign of its kind anywhere in
the world.”
New York is well positioned to initiate a similar citywide evaluative effort. Major city-based grantmakers such
as Robin Hood and the Edna McConnell Clark Foundation base their giving on strict adherence to evaluation and
outcomes. And some nonprofits, including the Harlem
Children’s Zone, have developed sophisticated internal
accountability systems. Still, these nationally recognized
organizations make up a tiny fraction of the larger field of
nonprofit organizations under government contract.
On the public side, the Bloomberg administration
has moved the needle. City Hall’s main program evaluation mechanism, the HHS Accelerator System, for the
first time is tracking the vast array of City service contracts. Though a big step forward, it stops well short of a
full effort to measure impact. Another notable initiative
is the Mayor’s Center for Economic Opportunity (CEO),
a mayoral-controlled entity that uses a mix of City and
foundation dollars to develop and rigorously assess new
human service programs. The difference is that CEO is a
vehicle for new programs, not existing ones.
Taken together, these initiatives position New York
to launch an effort akin to Project Oracle. The city is
home to strong, metric-committed philanthropies; City
Hall has created the building blocks for consistent tracking and evaluation; and there is a wide range of universities throughout the boroughs. What New York needs is
a common plan and a commitment by the City and nonprofits to work together.
6  Spacehive
London • Crowdsourcing Capital Projects
INNOVATION IN A NUTSHELL
Using a new crowdsourcing website, the funding of capital projects—bridges, gardens, community centers—is
being transformed throughout the United Kingdom as
communities develop and jointly fund major new projects
with local government.
KEY COMPONENTS
»» An easy-to-use internet platform with government
matching funds is available for community-generated
capital ideas
BENEFITS
»» Cities fund capital projects without additional debt
»» The process generates community interest and a
sense of public ownership
»» Some projects may garner enough community support to be achieved without any government investment
New York City commits an average of $6.8 billion yearly
to major capital projects. Unlike the City’s yearly expense
budget, the capital budget is primarily funded through
long-term bonds. Overall, the City’s capital budget is relatively robust. New York’s bond rating is high, allowing the
City to issue debt at low interest rates and fund many projects at once. But as in many cities, the capital program has
room for improvement. The City’s capital expenditures
exceed its funding commitments by about $1.4 billion annually, and the City is projected to incur greater imbalance in years to come. At the same time, the City’s capital
funding process remains somewhat insular. Community
Boards submit requests to the mayor and their borough
president, but the power of allocation still remains in the
hands of relatively few government officials.
Several cities in the United Kingdom have begun
to transform their capital processes. Rather than allowing projects to be determined chiefly by city and regional
agencies, these cities are turning to their local communities for ideas. And rather than relying solely on government, they are opening the way to receiving private, individual and philanthropic dollars to match public sector
allocations.
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This radically different approach is being propelled by
a London-based start-up called Spacehive. Launched two
years ago as the world’s first “funding platform for public
space projects,” Spacehive is modeled on the pioneering
crowdfunding site Kickstarter. The difference—and it’s a
big one—is that Spacehive is focused on the civic sector,
building close relationships and full-on partnerships with
local governments in the UK.
Using the website, any organization or individual
can propose a new capital project or new use for a public
space, and raise funds to launch it. To ensure its viability and success, a project only gets a green light when its
funding target is met.
Additionally, Spacehive is closely attuned to the complexities of planning and capital funding. Project risk
management, contract frameworks and funding verification are all built in to the platform, and no project advances without required planning and regulatory permissions.
Spacehive has invested a great deal of time in meeting
with regional officials to explain the workings of the website and its potential utility. The result has led to a spate of
projects that originated at the community level, as well as
other endeavors in which individuals or businesses have
stepped up to support government-initiated works.
In High Wycombe, a private entrepreneur proposed
a capital project to create a business incubator. Given its
popularity on Spacehive, both the national and local government authority pledged one-third of the needed funding. In Wales, the government struggled for eight years
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to secure funding to build a community center. Utilizing
Spacehive, the remaining $55,000 was quickly raised, assisted by celebrity and corporate support.
This is only the beginning of what may amount to an
“inversion of the capital process,” according to Spacehive
CEO Chris Gourlay. The company is in the final stages
of drafting full-partnership agreements with UK governments to create a new capital program. Under it, a local
government authority would dedicate a sizeable portion
of its capital budget in advance to match worthy projects.
Under this model, a New york City agency could potentially carve out a set percentage of its capital budget to
support crowdsourced projects. Communities would be
able to draft projects and raise funds. Once a threshold of,
say, $1 million in private capital was reached, a full government match would be triggered. Government would
get not only the benefit of local creativity and ownership,
but also private funding from individuals, foundations
and businesses toward specific projects.
Clearly, many issues need to be addressed, including
how best to vet proposals. But New York is already fertile
ground for civic-oriented initiatives. The City Council
Participatory Budgeting process allocates small amounts
of Council funds for community projects. But capital projects funded by crowdsourcing can be an avenue to even
greater heights, allowing communities, companies and
government to fund and create new public spaces jointly,
working hand in hand to improve existing infrastructure.
Zero Waste
San Francisco • A Comprehensive Approach to Increasing Recycling & Improving Waste Management
INNOVATION IN A NUTSHELL
San Francisco introduced its Zero Waste program in
2002. Progress has been swift. From 1990 to 2010, recycling rates rose from 20 percent to 77 percent. Recent
waste management reforms have targeted retail, packaging, consumption, public events, government procurement and construction and debris.
KEY COMPONENTS
»» The 2002 Zero Waste Resolution sets explicit goals:
75 percent landfill diversion by 2010 and zero waste
by 2020
»» SF Environment drafts an annual zero waste strategic
plan
»» Relentless policy experimentation and incremental
reform
»» Permanent no-bid, no-franchise-fee contract with
Recology, a private garbage collection and resource
recovery company
BENEFITS
»» Dramatic increase in recycling rates
»» Dramatic reduction in methane emissions from landfills
»» Each category of waste is directed to its economically
optimal disposal route, increasing recycling revenue
for government, business and developers
A meager 15 percent of New York City’s household waste
is recycled, ranking it 16th among 27 major American cities. This environmental and managerial shortfall comes at
a substantial expense. New York’s disposal costs have ris-
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en dramatically in the past two decades, from $81 million
in 1991 to $320 million in 2011. Each year, the city’s Department of Sanitation trucks log 40 million miles hauling
2.9 million tons of garbage to remote landfills. Emissions
from transport and landfills equate to 679,145 metric tons
of greenhouse gas, equivalent to the annual emissions of
133,000 cars.
In San Francisco, the nation’s leader in waste management, recycling rates have reached an extraordinary
77 percent. This achievement is not simply the product
of Pacific Northwest progressive culture, but of strategic,
multidimensional, and long-term planning. Much of San
Francisco’s success stems from the city’s Zero Waste Goal,
passed by the San Francisco Board of Supervisors in 2002.
It established an unambiguous mission: 75 percent landfill
diversion by 2010 and zero waste by 2020.
The Zero Waste Goal was the catalyst for a succession
of new policy initiatives, each of which has played a role
in bringing up the recycling rate. The policies, orchestrated by the city’s Department of Environment, are generally
divided into a handful of fields: production and packaging, consumption, public and private disposal, government procurement, and construction and debris. Policies
are rolled out incrementally, conscious of their interplay.
This long-term strategy now amounts to a collection of
pragmatic and effective reforms: The city banned styrofoam and plastic shopping bags in all retail establishments,
including grocery stores; food-service ware and packaging in restaurants, coffee shops, food courts, and cafeterias must be recyclable or compostable, including napkins,
paper bags, wooden coffee stir sticks and beverage cups
and lids; all public events must be stocked with sufficient
recycling and compost receptacles and staffed by trained
waste liaisons to assist and direct residents and tourists;
Yellow Pages distributors must obtain opt-in agreements
from all residents before delivering phone book directories; and a cigarette litter abatement fee of $0.20 per pack
was established to recover the cost of collecting and deterring cigarette litter on city streets, sidewalks and parks.
To exploit its procurement leverage and bully pulpit, the San Francisco city government directed its most
stringent regulations inward. A Zero Waste coordinator was designated at every city department location. All
City agencies are required to purchase approved green
products with recycled content, to refrain from purchasing bottled water and to reduce paper usage, setting small
margins as a default on all government computers.
In what is credited as the major contributing factor
to San Francisco’s high rate of recycling, former mayor
Gavin Newsom introduced the Construction and Demolition Debris Recovery Ordinance in July 2006. In the
first year alone, registered facilities diverted an additional
26,000 tons of mixed debris, a 25 percent increase. As of
2012, the Department of Building Inspection approved
210 Demolition Debris Recovery Plans tailored to individual projects, achieving diversion rates of 65-99 percent.
Not all of San Francisco’s policies, of course, are easily
replicable. Legal enforcement of recycling and composting as well as pay-as-you-throw disincentive programs—
foundational components in each of America’s high performing cities (San Francisco, Seattle, Portland, and Los
Angeles)—is poorly suited to New York’s housing stock.
In Seattle, for instance, the gap between recycling rates
in single-family and multi-family housing is staggering:
71 percent versus 30 percent. Coordinating between landlords and residents is expensive, time-consuming and rife
with hostility. In New York, where only 16 percent of residents occupy single-family homes (compared to 49 percent in Seattle and 33 percent in San Francisco), this is a
major hurdle. The problem is exacerbated by New York’s
almost complete lack of alleys, leaving inadequate space
for multiple, waste-specific dumpsters. A more boroughspecific approach would be necessary in New York, reserving recycling and composting requirements and payas-you-throw programs for less dense neighborhoods.
But while a comprehensive waste management model
must consider New York’s unique terrain, Department of
Sanitation studies have rightly designated San Francisco
as the most comparable American city. For instance, their
retail, packaging, consumption, public event, government
procurement and construction and debris reforms are
not dependent on geography and housing stock—making
them highly replicable.
Earlier this year, Mayor Bloomberg announced a goal
of doubling the city’s recycling rate to 30 percent by 2017,
and rolled out plans to add 1,000 new recycling containers
on city streets and ban styrofoam packaging from stores
and restaurants. This is a great first step, but the next
mayor will have to execute these plans. In doing so, they
should aim higher and follow San Francisco’s lead in overhauling its waste management system.
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Badging
8  Digital
Philadelphia, Providence & Chicago • Creating an Alternative Assessment System for Out-of-School Programs
INNOVATION IN A NUTSHELL
Philadelphia, Chicago and Providence have all begun to
introduce digital badging initiatives that allow students
both inside the K-12 system and outside to earn credentials for skills they learn in a wide variety of educational
settings, from digital tools workshops at public libraries to
art classes at museums.
KEY COMPONENTS
»» A system of badges designating recognized programs
or skills
»» A digital portfolio, or “backpack,” that the student can
control and curate like a resume
»» The development of curricula at schools, workforce
development agencies and even community colleges
that recognize and build off the badge system
BENEFITS
»» Provides an alternative assessment system that recognizes progress outside of traditional institutional
learning
»» Incentivizes the development of talents and skills that
too often go unrecognized in the K-12 school system
and other institutional contexts
Digital badging is already an established credentialing
method in the tech sector. A wide variety of badges issued by event organizers, online learning environments
(so-called Massive Open Online Courses or MOOCs),
and other educational providers are widely recognized by
employers in the industry. In fact, according to many industry insiders, a Khan Academy badge designating proficiency in a coding language like Python will carry even
more weight with Google and other tech companies than
traditional four-year computer science degrees. Philadelphia, Chicago and Providence have all recently unveiled
initiatives that apply this model in different ways to outof-school learning for youth.
Philadelphia’s badging system, called Digital OnRamps, is being implemented by the Philadelphia Academies in conjunction with the city’s primary youth development agency, the Philadelphia Youth Network. It
already includes several online courses and will eventually
grow to include face-to-face programming in both the
youth development and adult education systems. By contrast, Providence’s badging system is being implemented
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primarily through that city’s school district, as a way of
broadening and standardizing afterschool programs. Chicago, meanwhile, is unveiling a program this summer
called the Summer of Learning that uses badges as a way
of incentivizing youth to participate in summer programs
at a wide variety of providers, including city libraries,
schools and museums.
Though new and still untested outside the rarefied
world of tech, using a badge system to recognize accomplishments outside of school could be a powerful way to
encourage passions in kids even when they are struggling
in school or have dropped out altogether. Chris Lawrence, director of the Hive Learning Network in NYC,
which provides programming in the digital arts to kids
in afterschool programs and issues badges to participants
who achieve milestones, says that many of the kids he sees
who excel in Hive programs are often failing in school.
The badges give them something to strive for, and they
legitimize accomplishments in settings that don’t feel like
school, he says. But they could also be so much more than
that if they were more widely recognized by educational
providers and employers. A more established “marketplace” for badging, says Lawrence, would open up opportunities for kids to take their learning to the next level
with another educational provider or even an internship.
Cities have a huge role to play in creating this larger
marketplace, but they don’t have to define all the parameters from the top down in doing so. A school district or
youth development agency shouldn’t necessarily create
its own system of badges, which could result in a walled
garden, but encourage a wide variety of third parties to
begin issuing badges and then choose how to honor them
in school and city-sponsored development programs. The
digital portfolios, or “backpacks,” should also utilize open
source software that kids can take ownership of and even
curate to show off skills and accomplishments that they
want to market.
City agencies like the Department of Youth and Community Development could also work with employers
like Google, IBM, Con Ed, Verizon and Time Warner
to develop standards for which badges they will accept in
internship and job applications (perhaps as a part of the
city’s Summer Youth Employment program). And the
city’s community college system could lend even more legitimacy to certain badges by developing curricula, even
in remedial classes, around kids’ accomplishments in areas
like digital media, technology and the arts.
With over 172,000 disconnected youth and one of
the lowest GED attainment rates in the country, digital
badging could prove to be a powerful tool in New York.
It could help the city better leverage all the educational
programming happening among community-based organizations and other nonprofits (libraries, museums, etc.)
and ultimately increase the effectiveness of its own youth
development efforts.
Savings Commission
9  Budget
Chicago • Private Firms Develop Mass Budget Savings
INNOVATION IN A NUTSHELL
A coalition of Chicago’s top corporate consulting and law
firms crafted a $100-million budget-savings plan for the
incoming mayor—at no cost.
KEY COMPONENTS
»» A nonprofit intermediary coordinated the team of senior partners
»» All ideas were tested for legal, fiscal and political feasibility
»» The final product was a professional presentation
that was easy to understand and implement
BENEFITS
»» The plan taps the private sector for knowledge, skills
and results.
Government bloat is a familiar lament. Rare is the truly
constructive suggestion of exactly how to cut costs without sacrificing vital municipal services.
In Chicago, however, the city’s business community
provided just that. As part of a larger transition plan, a
coalition of partners from the city’s major consulting and
law firms drafted a realistic blueprint for cutting $100
million from the city budget, and revenue ideas for millions more. In 2001, newly elected Mayor Rahm Emanuel
wasted no time in implementing the proposals, and in the
first 100 days saved taxpayers an estimated $50 million.
The process leading to the corporate blueprint was
developed by the Civic Consulting Alliance, a 27-year-old
organization established to coordinate corporate firms
to help further City Hall’s top priorities through pro bono
engagements. Its approach is relatively simple: the Mayor
develops reform plans, and Civic Consulting assembles
senior partners to further the goals through traditional
business analytics, research and strategy. Over the past
five years, Civic Consulting estimates that $75 million in
billable hours have been dedicated to revamping the local community college system, reforming local policing
strategies and establishing the Chicago area’s first regional
planning board.
Unlike other projects, the latest cost-saving blueprint
was launched during a municipal transition and brought
to the mayor-elect as the transition was being completed.
As with all its projects, Civic Consulting avoided
lengthy planning meetings, promptly matching the right
firms and executives to a variety of assignments. A.T. Kearney was charged with developing a full financial model
for the City and assessing real cost drivers. The exercise
exposed structural deficit challenges, and included a review of all outstanding City labor and vendor contracts to
identify wiggle room for savings in the months and years
ahead. Deloitte examined other cities’ financial models.
Another firm looked at revenue opportunities, and Mayer
Brown examined legal issues surrounding the emerging
savings and revenue proposals. Each firm dedicated two to
three people who worked full time for nearly five months,
while Civic Consulting convened biweekly coordination
meetings, assigning six staff members to the project.
The proposals focused on long-needed fixes. One led
to the reorganization of trash collection routes according
to the street grid rather than to aldermen’s traditional political considerations. This simple, if previously political,
reform will save the city tens of millions annually.
Probably the biggest savings, though, will come from
the overhaul of the City’s purchasing activities. Based on
the blueprint, the City now uses a “spend cube” to analyze citywide contracting and payment data. It lets City
managers know not only how much was spent and when,
but with which vendors and in which categories of goods
and services. The analysis highlights opportunities to
consolidate contracts or negotiate with vendors, and
suggests other actions that offer the potential for significant savings. Most government entities rarely engage in
cross-agency cooperation of this kind, let alone citywide
coordination in purchasing (e.g., one department buys its
computers from Lenovo, another from Dell). In the first
year alone, the “spend cube” analysis saved the City millions of dollars.
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Chicago has also begun to coordinate its purchases
with surrounding Cook County, from street salt to janitorial functions.
On the revenue side, Chicago’s corporate partners
suggested developing an Infrastructure Trust, building on
an idea pursued by the White House called an infrastructure bank. A new nonprofit subsidiary was established
that uses pooled debt from local banks to build or repair infrastructure that has difficulty receiving financing
through the municipal bond market. Mayor Emanuel set
this up within a year of taking office. It is now a national
model for fostering locally subsidized building.
New York is well positioned to pursue the corporate
coalition model. Civic Consulting has received foundation support to establish an office in New York. Additionally, the City, through the nonprofit Partnership for New
York City, has a tradition of tapping consulting firms to
generate strategic plans for mayors. The Civic Consulting
model could move this mode to the next level, assembling
senior partners from corporations. As in Chicago, the
next mayor of New York can use this approach to create
major savings and revenue-generating models.
Data
10  Open
Seattle & San Francisco • A More Transparent, Inclusive & Collaborative Government
INNOVATION IN A NUTSHELL
Convinced that open data does not just improve the transparency of government, but governance itself, Seattle and
San Francisco have used open data to spur inter-agency
information sharing and encourage participation from
parties outside of the public sector.
KEY COMPONENTS
»» All agencies, including the police, release data on a
tight timeline
»» Data is routinely updated and accessible via affordable
and widely available software
»» Open data offerings and formatting are harmonized
with other cities
BENEFITS
»» A more transparent and inclusive government
»» Improved coordination and information sharing between City agencies
»» Spur economic development in the civic-tech sector
Governance is impossibly complex. With scores of agencies administering thousands of programs for millions of
constituents, it’s little wonder that residents, businesses,
politicians and public employees struggle to comprehend
and reform their government. In recent years, open data
has emerged as the newest and perhaps most promising
remedy, allowing residents to monitor their government,
activists and hacktivists to participate in governance, and
public agencies to collaborate and share critical information.
According to Mike Flowers, head of New York’s Office of Policy and Strategic Planning, sharing data “is not
a technological issue, it’s a bureaucratic issue.” The most
complex and intractable urban problems demand interagency coordination. Youth violence is not just an NYPD
issue. Homelessness is not just a DHS issue. Both necessitate collaboration with HRA, DOE, ACS, SBS’s workforce
development office, DCA’s financial empowerment office, and many others. Opening data to one another (while
simultaneously opening it to the public) is critical to this
collaboration. Former Seattle chief information officer
Bill Schrier found the most frequent users of an agency’s
open data are other city agencies.
NYPD, the second-highest staffed agency in the city
and surely the most ubiquitous, occupies a pivotal role in
authorizing and empowering New York’s most needed
inter-agency partnerships. Unfortunately, their transparency and willingness to share information has been underwhelming. Where Seattle provides real-time 911 calls
and redacted police reports along with mapping capabilities and Twitter updates, the NYPD is curiously absent
from the City’s generous open data offerings. With crime
data so central to understanding and resolving New York’s
most pressing challenges, this lack of transparency is not
just civically irresponsible, it also hamstrings the work of
numerous city agencies and nonprofits.
And police data is not the only issue. While New
York’s 2012 open data legislation is the envy of many
cities, its 2018 implementation timeline “reflects government’s general inability to move at the speed of technology” according to Stephen Romalewski, an open data
advocate and the director of the CUNY Mapping Service.
In February 2013, under pressure from the Office of the
Public Advocate, the City released Department of Health
and Department of Consumer Affairs data on small busi-
16
ness inspections and fines. The City of Chicago published
a similar data set two years prior.
Beyond good governance, open data reform is a key
component of economic development. A recent study
found that half a million jobs have been created around
mobile and web apps. In New York, the diversity and volume of open government data has helped nourish several
of these start-ups. But those companies can only flourish
if the data is accurate, accessible, and routinely updated.
San Francisco CIO Jay Nath, for instance, is working to
ensure that application developers can access data in multiple formats, such as CSV, XML or JSON. When New
York’s Department of City Planning releases data that can
only be downloaded in prohibitively expensive software,
it is what Presidential Innovation Fellow Phillip Ashlock
would call “hidden in plain sight.”
As the civic-tech sector evolves, harmonization between cities will grow increasingly important. When data
structure is standardized, developers needn’t customize
their apps for individual cities. This stimulates participation from programmers around the country as well as
larger, more sophisticated companies who typically ignore
app contests because submissions only reach a limited audience and are not easily monetized. New York took an
important step when it collaborated with San Francisco
and Yelp to standardize its food inspection data. Regrettably, it has been slower to adopt the newest Open311
protocol currently operating in over 40 cities worldwide.
NYC is already a leader in open data. Now it must become the leader. The benefits are clear: greater transparency and accountability to residents, increased collaboration between agencies, and improved economic prospects
for our growing, but still nascent tech sector.
ID Prepaid MasterCard
11  City
Oakland • Municipal Identification & Debit Card
INNOVATION IN A NUTSHELL
Oakland has unveiled a new city government ID card with
a novel debit card feature. Designed to assist low-income,
“underbanked” individuals, it offers ease-of-access to reputable banking and government services.
KEY COMPONENTS
»» Mayoral support and coordination
»» Fair rates of interest and fees
»» Well-devised application processing and ID card distribution
»» Extensive public awareness campaigns
BENEFITS
»» The underbanked are guided toward formal banking
practices that encourage savings and help them avoid
predatory financial practices
»» The card also provides a free or low-cost alternative
to other forms of government-issued ID, like a driver’s license
Earlier this year, Oakland Mayor Jean Quan launched a
city-level identification card program. While cities such
as Los Angeles; Washington, DC and New Haven issue
city-level government identification cards, Oakland is the
first to meld a debit card feature into the municipal ID.
There is great need for such a vehicle. Underbanked
residents either 1) do not engage in standard, recognized
money-management practices or 2) engage in informal
banking practices, whether legal or illegal. The reasons
are many (e.g. cultural, legal, etc.), but the consequences
are near-universal: People living in underbanked communities are left out of everyday transactions in which a debit/credit card is the most safe common vehicle and sometimes is required. The underbanked individual also misses
out on the convenience of ATMs and cannot manage his
or her expenses online. Moreover, the underbanked are
more vulnerable to predatory lenders and card vendors
that charge exorbitant interest rates and fees.
Oakland’s Municipal ID card offers a reliable, government-backed alternative to low-income residents. Created in partnership with SF Global, a card vendor company,
Oakland’s Municipal ID costs $10-$15, depending on the
age of the applicant, and offers transparent fee structures.
Although traditional banks offer better rates and fees, the
Municipal ID was not created to compete with them or
replace them. Rather, the cards were designed as a city
government identification card that also include a nonpredatory debit card function, encouraging its bearers to
enter into formal banking practices. Oakland residents
with proof of identification (domestic or foreign) and city
residency, can apply in person or via a city website.
Oakland’s Municipal ID card program and its dedicated website were launched in March, so the measured
benefits and pitfalls have yet to be determined. However,
an issue has arisen from concern that Oakland may be
17
distributing government identification to undocumented
individuals. In addition to federal immigration legalities,
federal privacy issues can be problematic as well. A banking institution’s obligation to comply with federal immigration policies can conflict with clients’ right to privacy.
While the model is still in development, there are immediate benefits to a wide range of communities. Because
Oakland’s Municipal ID card was designed primarily for
underbanked and immigrant communities, the users of
the card are encouraged to steer away from the pitfalls of
cash-only based finance. They might be encouraged, too,
to increase their participation in the formal economy, and
ideally to seek and, when deemed eligible, gain greater
access to government social and protective services for
themselves and their families.
While immigration issues on the municipal identification issue are unresolved, New York can still move toward adopting such a program. In 2007, the City Council
introduced a municipal identification program based on
one in New Haven, Connecticut, but the proposal was
tabled amid the controversy of undocumented individuals gaining access to government identification. New York
still has the opportunity to revisit this idea if Oakland’s
program is proven to be a success.
New York can minimize controversy by marketing
the municipal card as primarily a bank card that includes
other city service products (e.g. Metrocard, library card,
coupons, etc.), in addition to providing a secondary use as
an general ID card of potential value to immigrants and
others who could use it to access a variety of services. A
substantial number of New Yorkers thus would experience improved access to legitimate government and commercial services and be encouraged, as well, to participate
openly and actively in the life of their community. New
York has been a trailblazer in addressing the needs of
immigrants and if the city decides to implement its own
municipal identification card program, it can continue its
groundbreaking efforts on behalf of immigrants and potentially make a major impact on the gathering national
discussion on immigration policy.
Accessory Dwelling Units &
12  Basement Conversions
Seattle, Vancouver & Santa Cruz • Helping the Elderly to Comfortably & Affordably “Age in Place”
INNOVATION IN A NUTSHELL
An Accessory Dwelling Unit is a small, self-contained residential structure sharing a lot with an existing house. In
Seattle, Vancouver and Santa Cruz, legislation was enacted to permit ADUs on sufficiently sized lots in one- and
two-family zones. Building regulations were also relaxed
to allow formerly illegal subdivisions to be safely brought
to code without facing severe fines.
KEY COMPONENTS
»» City Council authorizes Accessory Dwelling Units,
mandating minimum lot size and maximum floor
area ratio (FAR)
»» Department of Planning pre-approves design standards
»» Design competitions, targeted primarily for elderlyspecific needs, stimulate cost-effective plans
»» Manuals and workshops are prepared to help homeowners take advantage of a one-time “grace period”
to bring their illegal units to code without penalty
BENEFITS
»» Increase the affordable housing stock
»» Regulate formerly illegal and unsafe subdivisions
»» Allow the growing elderly population to comfortably
“age in place”
By 2030, New York City is expected to add an additional
600,000 residents. The elderly will account for two-thirds
of this growth. While these figures confirm New York’s
increasing appeal and vitality, it raises important questions: Can New York’s housing market keep up with this
growth and how will the city accommodate the growing
number of seniors who wish to live near family members?
Seattle’s experiment with Accessory Dwelling Units
(ADUs) offers an intriguing solution. One- and twofamily homes are permitted to build a self-contained residential structure on their lot, provided it does not exceed
800 square feet of interior area and covers no more than
40 percent of the rear yard. Seattle first piloted an Accessory Dwelling Unit program in 1994. Fifteen years later,
18
its zoning code was officially amended to allow detached
ADUs throughout the city. The application and development process was streamlined by the Department of Planning—articulating precise design standards, approving
permits within six weeks, and organizing a design competition to spur creation of reasonably priced units.
In Vancouver, efforts to expand the affordable housing stock have been even more aggressive. In 2007, the
building code was relaxed to allow detached ADUs (not
exceeding 500 square feet, a size more appropriate for
New York) and to legalize basement conversions (“secondary suites.”) From 2010 to 2012, the City issued permits for 778 ADUs, 932 new homes with secondary suites,
and legalized 608 existing secondary suites. To implement
these reforms, the City of Santa Cruz offers an appealing
strategy. The City provides loans to homeowners as well
as incentives for keeping the units affordable. Manuals,
design guides and workshops were prepared to help homeowners take advantage of a one-time “grace period” to
bring their illegal units to code without penalty.
Encouraging the construction of Accessory Dwelling
Units will provide affordable housing options for all New
Yorkers, particularly the elderly. Affectionately referred
to as “granny flats,” they offer a proximate, but still independent space to house elderly family members—and
a welcome substitute to nursing homes. Alternatively,
the elderly can rent their increasingly oversized homes
and move into a newly built ADU. Transitioning to a
“backdoor cottage” behind one’s own or a family member’s home allows the elderly to “age in place;” staying enmeshed in their informal support network and providing
childcare, help with chores and possibly financial support
to their family.
To assure units are consistent with neighborhood
character and design standards, New York could organize
a competition to design prefab ADUs. Special consideration could be given to modular units manufactured in
New York, spurring economic development. Modular
ADUs can be customized for the aged, with wall sockets
higher off the ground, hallways wide enough for a walker,
bathrooms with support rails, and no stairs.
In New York, the boroughs outside of Manhattan
provide an excellent terrain for Accessory Dwelling Units.
One-and two-family residences account for 34 percent of
total lot area in Staten Island, 35 percent in Queens, 18
percent in Bronx, and 23 percent in Brooklyn. The average lot size for these homes is 4,300 sq ft in Staten Island,
3,400 in Queens, 3,100 in the Bronx, and 2,400 in Brooklyn. Even under Seattle’s generous 4,000 sq ft minimum
lot size, a significant number of locations in New York
could accommodate ADUs.
The demographic figures provide an even stronger
case for ADUs. While only 7 percent of Manhattan dwell-
ings house three generations, the outer borough average is
10 percent (not counting, of course, illegal subdivisions).
Excepting Manhattan, every borough has experienced an
increase in foreign-born residents over the last decade.
For many of these immigrants, ADUs provide a welcome
opportunity to remain close to their extended family in
a safer, more comfortable and more cost-effective manner. As Sujatha Raman, the director of Development for
Chhaya CDC, recognizes, “In Queens and other parts of
the city where our community is mainly low- and middleincome, the family structure of the Asian clients we work
with is larger and the housing model in New York City
doesn’t quite fit.”
For low-income immigrant families lacking appropriate and affordable housing, illegal subdivisions have provided a shadowy, unspoken “safety valve.” Housing advocates estimate 100,000 illegal dwellings in New York City.
But with fire and health hazards arising from unregulated
subdivisions and the impossibility of legally binding lease
contracts, “safety” is a severe misnomer. To ensure regulatory compliance, increased tax revenue, and the allocation
of educational, sanitation and police resources according
to actual population figures, Accessory Dwelling Units offer a smarter, safer and more equitable solution.
For many housing experts, simply legalizing basement subdivisions is considered the path of least resistance because it does not alter existing FAR. While this
is an appealing strategy, there are compelling reasons to
consider ADUs as well. Construction costs for ADUs in
Seattle are approximately $50,000, similar to the $10,000$50,000 cost of bringing illegal basement subdivisions up
to code, according to Sujatha Raman. ADUs are also less
vulnerable to flooding than basements; a real concern in
our post-Sandy environment. Finally, with no stairs and
the opportunity to design them according to the needs of
the elderly, ADUs are better suited to our aging population.
For NYC, zoning for ADUs and permitting basement conversions provides a rare opportunity, simultaneously addressing some of the city’s most pressing and
nettlesome problems. They would increase our affordable
housing stock; attenuate the city’s reliance on unsafe, illegal subdivisions and allow our growing elderly population
to comfortably “age in place.”
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Savings
13  Prize-linked
Michigan • Incentivizing Savings Accounts in Underbanked Communities
INNOVATION IN A NUTSHELL
Under a new model, cash prizes are used to incentivize
underbanked individuals to open and make regular deposits into a traditional savings account. The initiatives
aim to dramatically increase the number of low-income
families enrolled in the banking system.
KEY COMPONENTS
»» A nonprofit organization or government agency coordinates the program in partnership with a reliable
banking institution
»» It includes a marketing plan and a push for state legislation to allow cash, raffles and other incentives to
ensure wide participation
BENEFITS
»» Underbanked households open and maintain a savings account, increasing their access to financial products and services, while offering paths to better money management and greater financial stability
About 20 percent of US households, or 51 million adults,
are underbanked. In the years following the recent economic downturn, many families were forced to tap into
retirement funds and nest eggs. While the benefits of creating and maintaining a traditional savings account are
difficult to popularize through marketing, prize-linked
savings (PLS) programs have become a widespread and
effective tool to encourage families to save money and use
the banking system.
In the past, public awareness campaigns to promote
the creation and maintenance of savings accounts have
faltered because they have relied on simply advocating
the virtues of having a savings account. But prize-linked
savings have had greater success because they have leveraged new and enticing incentives—cash prizes, raffles and
lottery-like prize entries. Countries such as the United
Kingdom, Sweden and United Arab Emirates have widely
instituted these programs. In the US, Indiana’s Central
Credit Union first piloted the program and enrolled more
than 1,000 new accounts, accruing more than $500,000 in
savings deposits in the first five months. Based on the success of Indiana’s pilot, an asset-building nonprofit, Doorways to Dreams (D2D), spearheaded a highly successful
program in Michigan that serves as the current model for
PLS in the US.
In 2009, D2D partnered with the Michigan Credit
Union League to launch Save to Win, the country’s first
large-scale, prize-linked credit union savings account.
This program enters account holders into raffles for cash
prizes with each savings account deposit of $25 or more.
Michigan credit unions boosted public interest in the program by offering an annual $100,000 jackpot in addition
to smaller prizes to encourage people to create a savings
account and fund it regularly.
Most states ban privately run lotteries and Michigan
was no exception. But Michigan’s Credit Union Act included a provision that specifically allowed credit unions
to run promotional programs like Save to Win. In partnership with local governments, D2D and their partners
launched aggressive public awareness and enlistment efforts.
Through Save to Win, the number of low-income
residents enrolled in the traditional banking system has
spiked. Three years since the program launch, 25,000
unique accounts have been created, with over $40 million in accrued deposited savings. Because of PLS administered through Save to Win, the demand for credit
union memberships has increased, totaling more than one
million people in Michigan and Nebraska. In addition to
driving people to create a savings account, average savings account balances have grown from $817 to $1,779,
since one of the conditions of the raffle entry requires
long-term maintenance and regular deposits. Account retention remains fairly high, with an average 60 percent of
members maintaining their accounts for more than a year.
Replicating the Michigan PLS model in New York
would not be difficult since the City already has established
the Office of Financial Empowerment, a widely effective
asset-building agency at City Hall that works closely with
both government and financial institutions. The major
hurdle for New York to implement PLS would be the legislative ban on non-state institutions’ ability to offer cash
prizes. But if legislation were secured and a well-designed
program tailored for New York were devised, the city’s
large underbanked population could be spurred to save
money reliably and accrue other financial benefits with
credit unions or other qualified financial institutions.
20
Export Initiative
14  Immigrant
Los Angeles & Chicago • Helping Immigrant-Run Businesses Grow through Exporting
INNOVATION IN A NUTSHELL
Immigrant entrepreneurs account for a disproportionate
share of new businesses, and given their language skills
and established networks in their native countries, there
is clear potential for many to export their goods and services. Chicago and Los Angeles are targeting these enterprises in order to double citywide exports, thereby boosting local economic growth.
KEY COMPONENTS
»» Coordination between government, business and
education institutions to extend training, loans and
insurance to export-ready immigrant-operated businesses
»» Multinational Export Forums encouraging immigrant entrepreneurs to share country-specific expertise and collaborate on new export ventures
BENEFITS
»» Increasing city exports
»» Engaging immigrant business owners
»» Inspiring collaboration between diverse immigrant
entrepreneurs
Immigrants have long been entrepreneurial sparkplugs.
Just 13 percent of the nation’s population, the foreignborn operate 18 percent of small businesses. But while
immigrant entrepreneurs have become increasingly important to the nation’s economy, too few immigrant-run
firms ever grow into medium or large businesses, limiting
their economic benefits to the local economy. Economic
development officials in a number of cities are betting
that immigrant-run businesses have significant potential
to grow through exporting. With established networks
in their home countries, an understanding of local markets, and shared languages and culture, immigrants are
endowed with easier access to foreign markets. In Los
Angeles and Chicago, export assistance programs are
helping these businesses expand domestically by venturing abroad.
In the fall of 2011, Los Angeles Mayor Antonio Villaraigosa launched the Los Angeles Regional Export
Council (LARExC), an independent, not-for-profit partnership of government, business and educational institutions. Charged with doubling exports from small and
medium-sized companies, LARExC devotes special at-
tention to immigrant-owned businesses that either 1) do
not export, but have strong business ties to their country
of origin or 2) already export to their home country and
have the know-how to pursue additional destinations.
Companies are assessed and screened through an
online intake form, ensuring that resources are targeted
toward companies with the highest export potential. For
novices, the city port and airports conduct seminars in
trade financing, documentation, logistics and identifying
appropriate overseas markets. The Export Champions
Program, for the more export-ready, matches companies
with a team of UCLA and USC MBA students who provide market research and devise an export plan. Finally,
trade missions to East Asia and western Latin America allow companies to meet with local importers, government
officials and U.S. Department of Commerce service officers stationed abroad.
Chicago is also targeting export promotion programs
to the city’s foreign-born business owners. Chicago’s Office of New Americans and the Department of Business
Affairs believe cross-national collaboration is the cheapest and most effective method for harnessing existing expertise. At their co-sponsored export forums, immigrant
entrepreneurs share their country-specific knowledge and
collaborate in forging new markets.
Instituting a similar program in New York makes
sense. In the five boroughs, the foreign born comprise 36
percent of the city’s population but a hefty 49 percent of all
self-employed workers. Directing them to training, networking opportunities, loans and insurance to help them
export to their home countries or seek new markets beyond their home countries could help more of these firms
grow and provide a boost to the New York economy. Exporting provides one of the best opportunities for small
businesses to expand and add employees. Companies that
export pay 15 percent higher wages and are nearly 9 percent less likely to go out of business than non-exporting
companies.
As it is, too few of New York’s small businesses export their goods and services. Exports account for only 7
percent of New York’s total metro GDP, ranking it 93rd
among America’s 100 largest metros.
New York City currently lacks any meaningful program to help local businesses export. In today’s global
economy, it would be wise for New York to undertake an
export-assistance strategy. Targeting immigrant-owned
businesses is a natural place to start.
21
Tax Benefit
15  Commuter
San Francisco • Expanding Access to Federal Pre-Tax Transit Benefits
INNOVATION IN A NUTSHELL
The City of San Francisco now requires businesses in the
city with 20 or more employees to provide employees
with tax-free commuter benefits.
KEY COMPONENTS
»» Legislation mandates that businesses offer tax free
transit benefits to their workers
»» As much as $245 each month can be exempted from
federal, state and city income taxes, Social Security
and Medicare taxes, and federal unemployment insurance
BENEFITS
»»
»»
»»
»»
»»
Incentivizes people to use public transit
Decreases congestion
Decreases payroll tax for employers
Significant cost savings for commuters
Decreased greenhouse gas emissions
The federal government has long allowed businesses to
offer their employees the opportunity to save hundreds
of dollars a year in transit costs by using pre-tax dollars to
pay for subway, bus or commuter rail commutes. However, beginning in 2009, the City of San Francisco went
a step further and mandated that businesses in the city
with 20 or more employees offer their workers tax-free
commuter benefits, which are currently capped at $245
a month.
San Francisco’s law has greatly increased the number
of people taking advantage of the federal tax-free transportation program, a development that benefits both employees and employers and has no meaningful cost to the
city. Individual workers can greatly reduce their monthly
expenses, while businesses save in payroll taxes because
employees are deducting income on a pre-tax basis. By offering the benefit, employers also become more attractive
to potential employees. Even the San Francisco Chamber
of Commerce supported the measure, saying: “While the
Chamber generally opposes mandates on business, the
City’s requirement that businesses with 20 or more employees working in San Francisco establish a program to
promote the use of public transit can be an economic benefit. In addition to helping to reduce greenhouse gas emissions by getting people out of their cars and onto transit,
the law can be a money-saver for business.”
While a healthy number of San Francisco residents
were already using the transit benefits prior to the 2009
law, a significant share of small and medium-sized companies had not offered the program to their employees. The
law appears to be working. Since the ordinance was rolled
out, 64 percent of San Francisco businesses have complied
and companies with fewer than 100 employees have the
highest participation rates—more than 60 percent.
New York City could benefit from similar legislation.
Although a large share of New Yorkers already commute
to work by public transit—700,000 people in the New
York metro area, according to New York Public Interest
Research Group—hundreds of thousands of New Yorkers
currently are not taking advantage of the federal benefits,
mainly because they are unaware of the program. Currently, only about a quarter of large and medium companies in the city offer the federal tax-free transit benefits.
Expanding the number of businesses that offer these
benefits would lead to a higher participation rate among
workers, giving at least some financial relief to New Yorkers at a time when so many others costs—including transit fares—have continued to rise. According to the MTA,
New Yorkers who are in the 15 percent tax bracket would
save around 29 percent on every subway or bus ride if
they participate in the transit benefit program. Prior to
the recent fare hike, the average cost of a ride for those
using a bonus pay-per-ride MetroCard was $1.49 for participating employees, compared to $2.10 for those who
don’t take advantage of the federal tax benefit.
It would also encourage more New Yorkers to take
transit, a huge plus at a time when traffic congestion
across the five boroughs remains a major problem, and
ensure that more of the income earned in New York stays
in the local economy rather than being sent to Washington—a noteworthy benefit for a city that routinely sends
more tax dollars to the federal government than it gets
back in return.
“Tax-free transit benefits save transit riders hundreds
of dollars a year on commuting costs, give businesses a
no-cost fringe benefit to offer their employees and reverse
the flow of federal tax dollars from Washington to back
home,” says Gene Russianoff, staff attorney for the NYPIRG Straphangers Campaign.
22
EXPERT PARTICIPANTS In preparation for this report, we held two roundtable sessions to critique and refine our
policy proposals with a group of leaders from the city’s business, philanthropic and nonprofit
sectors. We would like to thank all those who participated. While they have not necessarily
endorsed the recommended ideas, their constructive criticism was extraordinarily helpful in
improving Innovation and the City and their input was greatly appreciated.
Scott Anderson
Amy Armstrong
Juanita Ayala Vargas
Bob Balder
Charles Brecher
Gerrard Bushell
Jennifer Cho
Joel Copperman
Henk de Jong
Michelle de la Uz
Andy Ditton
Shawn Escoffery
Ken Fisher
Dall Forsythe
Marek Gootman
David Hansell
Melanie Hartzog
Jen Hensley
Mike Hickey
Mike Holland
Jalak Jobanputra
Jennifer Jones Austin
Carol Kellermann
Andrew Kimball
Matt Klein
Steve Koonin
Eric Lee
Corinne LeTourneau
Stan Litow
Gail Magaliff
Brian Mahanna
Carolyn McLaughlin
Gary Schneider
Alexander Gail Sherman
Tony Shorris
Deborah Snyder
Eduardo Staszowski
Stefaan Verhulst
Sarah Watson
Carl Weisbrod
Karen Wong